U.S.-Korea Free Trade Agreement
Rules of Origin
Step 2: Determine whether there is an advantage to claiming preferential treatment under the FTA
Sometimes a country’s tariff on a product for imports from all countries (MFN rate) can be as low as or lower than the currently applicable FTA-negotiated preferential tariff rate (FTA rate). Since there are time and record-keeping costs associated with claiming eligibility of your product for the FTA rate, it is always a good idea to double check the current MFN tariff rate and compare it to the FTA rate.
There are three resources that will have pieces of the information you need: the FTA Tariff Tool shows you the FTA rate, including for future years, while the Customs Info Database and Korean Tariff schedules show you the current MFN tariff rates.
FTA Tariff Tool - You can input the Korean HS Code or tariff classification into the FTA Tariff Tool to identify the FTA rate agreed to for the product for this year and for future years. Korean FTA rates for most products were set at zero as of March 15, 2015, but rates on some products are staged down in increments from their starting rates to zero over a period of years. Note: Textile and apparel products and agricultural products are not yet included in this tool.
Customs Info Database - This database allows users to look up the current Korean MFN tariff rate for shipments originating in the United States and (coming soon) compare it with the FTA rate, using the first four to six digits of the product’s HS Code. Users of Export.gov are offered a free trial of the system with registration. This database also includes the Value Added Tax for Korea for your product. Get more information on VAT in Korea. Details on setting up an account for Customs Info Database.
Korean Tariff Schedule – Alternatively, you may access the Korean Tariff Schedule for free, but need to have first identified the full 10-digit Korean Tariff Code for your product (see Determine your product’s classification). With that information, you can find all of the tariff rates that apply to the product, including the corresponding FTA and MFN rates, in the Korean Tariff Schedule.
Note: The Korean Tariff Schedule is tool requires you to have all 10-digits (without punctuation). Additionally, the Korean 10-digit code is not necessarily the same as the U.S. Schedule B Code, so make sure not to use the U.S. Schedule B Code!
Compare the FTA rate to the MFN rate to determine whether there is an advantage to claiming FTA tariff treatment. As long as the MFN rate is equal to or lower than the FTA rate, there may be no real advantage to spending the time and effort to determine if your product qualifies for the FTA rate. However, if the FTA rate is lower, then you should determine if your product may qualify for the FTA rate. To do so, you will need to determine if your product is originating under KORUS.
Tip: Although most tariffs were eliminated under KORUS on March 15, 2012, the tariffs on some products will phase-out over time. Where applicable, the new tariff rates will take effect on January 1st of each year. The FTA Tariff Tool provides you the ability to see when the tariffs on your product phase-out.
Tip: For U.S. origin products to enter Korea under the preferential tariff rate, the importer must submit a claim for the FTA rate. This may be done by submitting a certification of origin or an importer attestation.
Tip: On some occasions, even if there is no difference between the FTA and MFN tariff rates, your importer may ask you to provide information that documents the origin of your product.
Note: The information presented on this website is meant to serve as a general guide. Only the agreement text and the customs regulations issued to implement the agreement are definitive. For complex issues or where interpretation is required, U.S. exporters should seek legal assistance or an advance ruling from the Korean Customs Service.